Lender Forced Into Shopping Center Development Business After Foreclosing On Eleven Unfinished Projects Scrambles To Preserve Financial Stake

The Wall Street Journal reports:

• Mezzanine lender Dominion Capital Management LLC didn't anticipate developing shopping centers when it lent $170 million to developer Premier Properties USA Inc. But that is what Dominion is doing since Premier fell into bankruptcy court last spring.

• Dominion, a small lender based in Atlanta, foreclosed in April on Premier's 11 shopping centers, which were in varied stages of development. With them, the lender inherited a pile of problems: anxious first-mortgage holders; millions of dollars in contractors' liens; and one new center where allegedly faulty construction forced retailers to vacate.

For more, see Real-Estate Slump Thrusts Lenders Into Unfamiliar Roles (Dominion Capital, 'Not a Developer,' Finds Itself Filling In for a Fallen Builder).